Decarbonizing the Data Industry

Germany’s data center sector is expanding like never before and simultaneously undergoing a quiet revolution in energy efficiency. International companies are helping make the physical act of processing information better for the environment.

 January 2023

The invisible infrastructure underpinning the Internet is in the midst of great change. Firstly, data center companies are increasingly administering their business off premise. Secondly, Germany has put a premium on business solutions that focus on climate action and maximal efficient use of resources.

Britain’s Telehouse, a firm that specializes in colocation data centers, has seized the moment. Béla Waldhauser, CEO of Telehouse Germany, is seeing growth rates of 10 to 15 percent per year. “Honestly speaking, we can’t build new data centers fast enough,” he says. “Our vacancy rate in Q1/2022 is down to 9 percent, which is an all-time low.”

The Bottom Line

Germany’s data center sector is not only one of the biggest in ­Europe but also increasingly at the forefront of innovative ­energy efficiency solutions.

More and more German start-ups are developing innovative waste-heat solutions. Dresden-based Cloud&Heat offers some of the most resourceful data centers in the world. Windcloud, from the town of Enge-Sande near the North Sea, has built Germany’s first carbon-absorbing data center that is powered by 100 percent wind, while its waste heat is used to raise CO2-absorbing algae. Then there’s the Eurotheum skyscraper in Frankfurt, which uses its in-house data center to provide heat to the offices, hotel, and restaurant under the same roof.

This flurry of innovation in the data sector has attracted the attention of major players. Telekom is working together with the Fraunhofer Institute to create several new technologies that make data more energy-efficient. Telehouse is at the forefront of that initiative with the Westville residential project in Frankfurt-Gallus. Due to be completed in 2025, the development will include 1,300 apartments.

“It’s a real beacon project in Germany,” says Waldhauser. The CEO is also the spokesperson for the Alliance for the Strengthening of Digital Infrastructures in Germany and a board member of the Climate Neutral Data Centre Pact.

“The most attractive market in Europe”

Europe is dominated by four data-center markets – Frankfurt, London, Amsterdam and Paris – but there are signs that the hierarchy is shifting. Waldhauser is among many observers who believe Frankfurt is currently “the most attractive market in Europe.” Despite the fact that German energy prices are relatively high. There is a variety of reasons why the city has become such a coveted location, explains Isabel da Silva Matos, digital economy specialist at GTAI. For one thing, Frankfurt has the world’s largest Internet node, DE-CIX, where around one thousand primarily European networks converge. It’s also a well-known hub of European finance and home to the German Stock Exchange and the European Central Bank – huge institutions that need to ensure they can transfer data quickly and securely. But other German cities such as Berlin, Munich or Hamburg are also becoming important data nodes. “Proximity to the customer plays an important role too, not just speed,” Matos says. “And clients want to be sure that their data doesn’t just end up being stored anywhere. Germany is the biggest economy in the EU and is considered very secure.”

»We can’t build new data centers fast enough.
Our vacancy rate is down to 9 percent – an all-time low.«

Béla Waldhauser,

CEO of Telehouse Germany

Ambitious government plans

The escalating climate emergency and Russia’s war on Ukraine mean that data center companies need to be more than just well located: They must also lower carbon emissions. Major players in Germany have signed on to the EU’s goal of climate neutrality by 2030. But Olaf Scholz’s government wants to move faster, pledging to make new data centers CO2-neutral by 2027. It has provided funded programs for developing new environmentally friendly technologies.

Frankfurt leads Germany’s data revolution

IT performance of Germany’s most important data center locations

Hamburg: 33 MV

Berlin: 37 MW

Munich: 50 MW

Frankfurt: 459 MW


reply (1)

  1. Sibylle Yaakov says:

    Liebe Frau Matos,
    thank you so much for this insightful article on data centers as THE critical infrastructure element of modern times. Impressive to see how the industry swiftly adjusts to current challenges.
    please publish more of these tech news, I’m sure I’m not the only one reading this.
    Best regards!


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